The global stock market sell off has fear racing around the world from market to market. Fundamental analysis of stocks means nothing as “investors” dump everything they own. I am curious on a couple of points. What is driving the continued selling of stocks by the institutions: Is is margin calls to hedge funds or is it that even “professional” money managers cannot control their fear. Also, I recently read that 35% of all U.S. equities trading is through ETFs. My reading of the ETF crowd is a significant portion are investors trying to catch the next hot thing and it is understandable that they dump when times are bad. Also, does massive selling of ETFs cause further selling of the securities in the funds?

Next on my question list: Where are the buyers? At this point there are many stocks of really good companies at tremendous values, yet there seems to be little buying to support the share of any company. A few days ago I was expecting a rapid price rebound when the market turned upward. Now, with the decline continuing to draw out, I believe many investors will stay on the sidelines, and the markets will stabilize at much lower levels. The “I”ll never buy stocks again.” crowd will stay away for quite a while (until the next market peak!).

At this point I plan to sit things out and wait to see where the market stabilizes. At heart, I am a fundamental investor and need to practice patience in times like these.